Why Enterprises Can’t Ignore Freelancers

Perhaps it was easier to view the freelance movement as nothing but a passing trend in 2010, but it’s certainly not the case now. According to the Bureau of Labor Statistics, between 1995 to 1999, 93% of the workforce worked in traditional work arrangements.

Independent contractors, on-call workers, temps, and contract company workers made up the other 7%. Back then, a fixed job was not only the goal, but the norm, for anyone entering the labour market. However, the landscape is looking vastly different now: currently, the freelance market contributes $715 billion in earnings to the national economy and the number of freelancers has inflated to 53 million people, which makes up roughly 34% of the working population.

This number is projected to scale up to more than 40% by 2020. What started out as a trend has reached far beyond one.

Freelancers on the Rise

The rapid growth of the freelance workforce has been driven by a number of factors. The unstable economy has made finding a job difficult for many people who belong to specific industries, the growing presence of the Internet has made it much easier to pick up contracts in other countries, and people are beginning to realize that professional security is no longer as secure as it used to be. Instead, more and more workers are opting for a lifestyle built around flexibility.

What is Driving the Freelance Revolution?

With all the negative press surrounding corporate wage gaps and employee mistreatment, “being your own boss” is looking sunnier and sunnier. And platforms which assist freelancers and the “sharing economy” are finding valuable positions in the marketplace: Airbnb and Uber each make it easier for individuals to become taxi drivers and hoteliers, Content.ly and HourlyNerd connects freelance writers and consultants with corporate contracts, Etsy empowers crafters to become small business owners, and Kickstarter helps anyone with a creative dream to raise funds while bypassing the bureaucracy of traditional distribution.

The freelance economy drives small business owners and entrepreneurs, creates international networks, supports local business, strengthens international tethers (a freelance writer can now feasibly find a stable client located across oceans without getting off their couch), keeps creatives creative, and decentralizes traditional corporate power centres. All from the comfort of home. It's also a proved model that works and there are many who have been doing it for years.

What Does it Mean?

However, with this massive overhaul of corporate and economic structure, some serious rebalancing needs to happen. We don’t yet have a clear picture of what the future will look like for lifelong freelancers, nor what happens on a generational scale how a lack of security helps or hinders individuals. And the future of a broader landscape for self-employment and diverse entrepreneurship is not without its negative implications.

Former Secretary of Labor Robert Reich warns, in a blog post titled “The iEverything and the Redistributional Imperative” that one-person businesses and new technologies that further enable automation will lead us into a situation where further wealth gaps may occur, and result in job scarcity.

He brings up the example of Kodak, a company which supported 145,000 employees at its prime in 1988, and compares it to Instagram’s 13 employees, who were able to service 30 million customers. Entrepreneurs who hit upon big ticket items stand to make millions, even billions of dollars from companies that need a fraction of the manpower once required. While new technology has made it more efficient to distribute products and service and necessitating less people to do so, Reich worries about a growing income gap, and an inability to redistribute wealth.

Final Thoughts

It’s hard to ignore the future of a growing freelance workforce, nor can we overlook the benefits of freelance work over the traditional work structure, for the individual, the global economy, as well as the environment. However, no big global movement is without its own unique problems. It is only a matter of time government regulators, and corporations started to wise up to growing freelance workforce and make necessary adjustments.

Note from Freelancer: John Rampton will be speaking at SydStart 2015, Australia's biggest startup conference! Pre-release tickets are now available for a limited time. Head over to SydStart.com now and secure your spot!

Best known as an Entrepreneur and Connector. John was recently named #3 on Top 50 Online Influencers in the World by Entrepreneur Magazine as well as a blogging expert by Forbes. Awarded Top 10 Most Influential PPC Experts in the World for the past 3 years.
He currently advises several companies in the bay area.